How Quick Must You Convert Your Online Leads?

You might be surprised to find out how short the life time is of online sales leads. This is something very near and dear to my heart because at the end of the day, when your paying hard earned $$$ for any marketing channel you’re ultimately paying for sales. If it doesn’t bring in more sales then it costs…. there’s NO POINT DOING IT! (don’t tell that I said that to the ‘branding’ folks).

Harvard Business Review just published a story on that this week, as always their research is in-depth and interesting. They stated some of obvious stuff… that “companies in financial services, automobiles, education, software, health care, professional services, and many other industries have increasingly turned to the internet to generate sales leads.” Duh! Online sales, set up correctly, becomes a money machine. Pay $4 make $8, what a concept. The online business model they show is THRIVING are (Warning: What you are about to read has been translated from HBR language into ‘normal words’ so we can actually understand it) those sites that take your information in exchange for ‘getting you the best quotes’ and all they do is turn around and sell those leads to as many insurance companies as will pay for them. It’s doing the hardest part of marketing… bringing in fresh leads. Turn on a Google Adwords account today and send it to a 3 page landing page to collect the leads. Pay $15/lead for the traffic, sell the leads for $30. I know for a fact mortgage leads are worth $200, Forex leads are worth $200-$250. It’s a legitimate business, but the ones HBR used as standup examples are those bastards responsible for spam of like 50 insurance companies and direct mail pieces for 6 months afterwards.

The true pros selling leads do it this way (at least the ones I’ve met): Rent email lists, send to landing page to collect leads (depending on the leads collect email, name, and on the 2nd encounter get home address). Say they do one drop for $5,000 to 50,000 emails. From that maybe you get 2,000 leads and 40 sales. The sales can be dam near any price point, whatever fits the audience in the email list. Turn around and rent the 2,000 leads you just got. (Hint: You can rent them out over and over again). Mailing addresses are great for the long term business, email addresses get money coming in fast. Oh and by the way… YOU can sell stuff to YOUR email list that’s growing everyday… whenever you want! HBR’s article didn’t explain any of the intricacies.

If you’re in the ‘leads business’ at all then you’ll find the results of their research: “firms are too slow to follow up on these leads.” They looked at over 22-hundred US companies. It broke down like this:

  • 37% responded to their lead within an hour
  • 16% responded within one to 24 hours
  • 24% took more than 24 hours
  • 23% never responded (how often does that happen to you? It bugs the hell out of me)

They analyzed 1.25 million sales leads, where HBR concluded a lead contacted within the hour are 7 times more likely to be a qualified lead and 60 times more likely than if contacted 24 hours or later. Think about how much these companies spend to get these leads in the first place. We call that the first transaction (aptly named), and it’s imperative it goes well for the consumer. That’s the whole basis of giving away a free report, whitepaper or lead magnet in exchange for someone signing up to your newsletter. Promise something, have the transaction, deliver on the promise immediately (via digital download that’s emailed to them automatically), and make sure the whitepaper far exceeds their expectations. They need to say upon opening it up, reading/watching it “dam, all that for just for signing up! There paid service must be AMAZING).

The rest of the article talks about the entrenched reasons why companies let this happen: pain of retrieving leads regularly, sales force focused on generating their own leads, rules for distributing sales leads among agents and partners based on geography and ‘fairness’ (bluh!). End it by saying “we’re conducting further research to more fully understand the causes and identify possible solutions.”

JULIAN FARLEY’S FINAL WORD: Be more bold HBR. Great article, but you seriously can’t figure this out?

  • Problem/Solution
  • Leads Picked up Daily/Write a program to automatically assign the leads and email them out. Too complicated? Just have them emailed to an administrator.
  • Focused on Generating their own leads/Reserve the right for salespeople to get leads. You have to generate your own leads until you prove yourself and get leads given to you. That’s how Dell structures their sales personnel. Honestly, I worked sales selling web design services, whenever I was given leads from the company I followed up fast. They were pushovers.. my success rate was like 50%. If salespeople aren’t valuing company leads take them away. My salesroom was structured as the highest converters received the most leads.
  • Fairness’ giving leads/We all know this is bureaucratic nonsense. I don’t deal with these shenanigans so I don’t know how to stop it. But if you put the contacts into an email auto responder designed to build a relationship with the prospect you can set it to peak at 2, 3, 5, 7, 14 even 21 days if it really takes you that long to figure out who gets what lead.
  • Hot Leads Contacted Quickly/Bottom line. Get an email auto responder in place and provide useful content. Someone looking for a mortgage broker would love to get an email with “The 9 Questions You MUST ASK When Hiring A Mortgage Broker”. Build trust on autopilot.

Value your list and your list will pay for itself over in SPADES. HBR loves trumpeting the power of the internet, and I agree… but apply it.

POSTED: 05.22.2011

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